10-6-11NYTimes--Where are the death panels when we need them? Gina Kolata

Health Care Cost Reduction Proposals

Nearly everyone agrees that something must be done about skyrocketing health care costs which have been rising must faster than wages. Summarized below are some of the cost reduction measures proposed by the health care reform bill passed by the House of Representatives and reported out by the Senate Finance Committee.

1. Forced productivity gains--The House and the Senate bills would reduce Medicare payments to hospitals, nursing homes and other providers by an amount comparable to routine productivity gains in industry as a result of implementing new technologies and better ways of organizing work. This could bring about a long-overdue application of W. Edwards Deming's priciples quality control to hospitals and other health care providers. It could save as much as $100 billion over ten years.

2. Tax "Cadillac" Coverage--The Senate bill would impose an exise tax on health insurance plans that cost $8,000 per year for an individual policy or $21,000 for family coverage.

3. Simplified forms--Both the House and Senate bills propose to incorporate into law the health caer insurance industry's pledge to provide a standardized form for computer processing. Doctors and patients agree that this step could save hundreds of billons of dollars over ten years.

5. Reform the Delivery System--Health care experts are nearly unanimous that the fee-for-service payment system which rewards doctors for the quantity rather than the quality of care they provide is one of the major contributors to skyrocketing health care costs. Most agree that doctors should be pushed to accept a standard fee for treating a specific illness or accepting pay for meeting a patient's yearly health care need. The bills in both houses would both implement pilot Medicare projects relying on incentive payments to get doctors to try them.

6. Independent Commission--The Senate bill would create an independent commission to monitor the pilot programs and recommend changes to Medicare's payment policies to prod providers to adopt workable, cost-saving reforms. The changes would have to be adopted by Congress, as a package, making it hard for narrow lobbies to decimate the proposed changes.

7. Managed Competition--Both bills provide for the creation of health insurance exchanges which would allow individuals and small businesses to choose from among several private plans, and possibly a public option. All the plans would be required to offer standard, easily compared options. Gaining access to millions of customers would provide an incentive for insurers to lower their prices.

8. Public Plan--There is support for providing a public plan in the final legislation which has been opposed doggedly and watered down in the House bill by insurance industry lobbying. The bill would provide for negotiating rates with providers rather than using Medicare reimbursement rates as reform advocates proposed.

9. Comparing Treatments--Obama's stimulus package provides money for research to compare the efficacy of various treatment modalities. For example, in which kinds of cases is surgery, radiation or monitoring best for treating prostate cancer? Are the most costly cholesterol lowering drugs more effective than less expensive generic substitutes? The Senate and House bills would accelerate this effort. The critics' charge that this proposal would ration care would only be true if you believe that paitents should have unlimited rights to ineffective treatments paid for by taxpayers.

10. Negotiating Drug Prices--The House bill would provide the authority for negotiating prices paid for drugs by Medicare and Medicare, a provision that should have been included in the Medicare drug bill passed by the Bush administration. Negotiation can work here as it does in other countries.

11. Malpractice Reform--Thanks to the trial lawyers support for Democrats, neither bill contains measures to reduce medical malpractice costs which are widely believed to be in the public interest. This issue, could provide an opportunity for a moderate compromise or trade offs malpractice measure to gain support for the final product of the House-Senate conference committee.

I am indebted to the NY Times Editorial of 11-14-09 for much of the above summary. I take responsibility for additions and omissions from the Times' editorial.

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Comments 32 comments

Thanks for laying this out in a simple and easy to digest way! Kartika

fishskinfreak2008 7 years ago from Fremont CA

Ralph Deeds is a hero for health care reform. Way to go. THUMBS UP

Vladimir Uhri 7 years ago from HubPages, FB

Ralph, no government can fix anything. The problem is money hungry Marxists materialists. They were transplanted form Europe here to US.

We still will have 30 millions uninsured. Cost is rocketing and government wanted to have all money since there is nowhere to go for money besides taxes.

I am a Physician and for Medicare bill for surgical procedure was over $2000.00 Medicare reimburse us $200.00 and anesthetist nurse which I use to do myself (putting patient to sedation) he got 300.00 dollars.

Mediate 2x bill for 8 patients with bill $1400.00 sent me two check 5 cents each. I framed checks in colors. I quit work for them. Let bureaucrats do the surgery.

breakfastpop 7 years ago

Dear Mr. Deeds,

Some of the proposed changes are long over due, but I will say this, if payments to doctors and hospitals are reduced for medicare patients, there will be rationing. Years ago, before the advent of supplementary insurance, doctors told their staff to avoid scheduling too many medicare patients in one day, or one week. The reimbursement wasn't worth their while and they had bills to pay. I know this for a fact, because I lived it. The same thing will happen again, only it will be worse.

eovery 7 years ago from MIddle of the Boondocks of Iowa

Ralph, I am sorry, but I can't believe the government can fix it all. I believe this will open the door to more and more corruption in the medical/government system. Medicare is known for the big cost of corruption within the system. I do not believe the government can run a system without the corruption escalating to a all time high. If if it does, is the government going to send KGB like agents to straighten it out.

Healthcare has a lot of problems. And a lot of the problems are governmental created. The medical doctors I talk to say they are overwhelmed with the paper work they have to do for the government and insurance companies. I have personally experienced many situations with doctors, where if you pay cash up front, and allow them to bypass all the paperwork, the cost over less than half.

Simple solution in lowering the cost. Allow people to pay up front and get reimbursed from the insurance companies. Healthcare accounts could be used to further set aside money so people could do this. Also, make Doctors and medical institutes give estimates on all procedures beforehand. This will allow shopping around and brings back competition to the process. Then we wont need Uncle Sam and all of the Washington bureautcrats to "take care of us."

The health bill still does not cover a large portion of the population who do not have health insurance now. Also, how will they enforce the ones who do buy health insurance. If they couldn't afford it before, how will they afford it when it is mandated. And if they do not buy it, it appears that they will be fined, and even possibly be subjected to go to jail. Why does this sounds like the KGB to me?

Thanks for letting us know some of the stuff in healthcare reform, but there is a lot more in there.

Keep on hubbing!

Ralph Deeds 7 years ago Author

1. It will not be easy to moderate skyrocketing health care costs. However, most of the above ideas seem to me like they are worth a try. There is no silver bullet.

2. I think they have more paperwork in many states for insurance companies than for Medicare.

3. $100,000 hospital bills are not unusual. Very few people could pay up front. I pay my dental bills up front and the dentist sends the information to my dental care plan and they reimburse me in part. However, I've decided that's a waste of time for everybody, and I'm canceling my dental care insurance at the end of this year. I think I can afford to pay any likely dental bill. I don't need a bill paying service.

You've raised some valid question. I don't pretend to have all the answers. I just hope that the final bill doesn't provide too big a gift to the health insurance and pharmaceutical companies.

Vladimir Uhri 7 years ago from HubPages, FB

Ralph, why try when it was tried in socialistic countries and they are getting away from it (China Cuba).

The problem is we do not learn from the past. We repeat it.

Washington knows only talk. Do they know anything about military? Do they know how to do surgery? But telling us how to manage cases.

Ralph Deeds 7 years ago Author

Vladimir, I respect your opinion as a doctor. However, I have a fair amount of experience as a patient, and I see plenty of room for improvement in the health care I've experienced. I have friends across the river in Canada nearly all of whom seem satisfied with their single payer government system. There are delays and other problems, but in Canada nobody goes bankrupt because of huge medical bills.

I can't speak for health care in the USSR or Russia or Cuba. But from what I've read health care is quite good in France, UK and the other countries in Europe, and it costs much less than here in the U.S. Is it possible that your attitude toward government involvement in health care is colored by your experience in the USSR?

eovery 7 years ago from MIddle of the Boondocks of Iowa

I can agree with you that this could be a big thing for the insurance and drug companies. It seems like they come out smelling like roses all of the time. I just like to know, where I should invest.

Keep on hubbing!

Beata Stasak 7 years ago from Western Australia

We are also satisfied with our medicare system in Australia.

I believe that government involvement in health care, child care, education and art/culture is very important. There are areas in human lives where should not be totally dependable on profits just because we can loose much more than we can gain - our potential and our life, that are priceless. Thank you for great hub Ralph.

Ralph Deeds 7 years ago Author

Beata, we can agree on that! Thanks for your kind comment. A couple of months ago we had a most enjoyable visit by some of my wife's childhood friends from Sydney. I've always wanted to visit Australia. And I've enjoyed lots of great movies from your country from "Breaker Morandt" to "Prisiclla, Queen of the Desert" to "Strictly Ballroom." My all time favorite is "The Coca Cola Kid."

Ralph Deeds 7 years ago Author

Thanks!

C.J. Wright 7 years ago

Cutting cost will cut care. Especially in the geriatric segment. No way around it. There is waste in that system, it should be cleaned up first.

We have already seen the administration preparing us for rationing....mamograms.

We have already seen the governments ability to deliver medical services....H1N1 vaccines...where are they?

You failed to mention that the government will collect taxes on this program for FIVE years before it makes an single entitlement. You also failed to mention that the CBO states that it will be budget neutral in 10 years. That means it takes ten years of taxes for 5 years of benifits.

Ralph I understand the need for some form of health care reform... This isn't it.

Ralph Deeds 7 years ago Author

Cutting costs won't have to cut care. There are plenty of ways to cut costs without cutting care.

SheriSapp 7 years ago from West Virginia

If you actually believe you can increase care and coverage while cutting costs, you are not as intelligent as I had wanted to hope you were. BO and his people keep talking about the billions in fraud and abuse of the current system, why don't we try to fix this before we overhaul the entire system?

Ralph Deeds 7 years ago Author

"why don't we try to fix this before we overhaul the entire system?"

That's a fair question. My answer is why not do both at the same time rather than leave 30 million without insurance and many without care? There are huge variations in Medicare costs from community to community which indicates there is plenty of waste in the system. And there is even more waste in care provided by private insurance.

WaymoreParsecs 7 years ago

The Government will attempt to make changes to health care costs. The cost reductions in the health care industry will force everyone in the industry to increase their prices, because their income will now be less than before. This will NEVER work. As long as the RICH business controllers are allowed to overcharge for everything there will not be a solution. The only thing that can be done for now is to make the existing system more efficient. Create jobs so that more people can pay taxes to help pay for it all.

A.J. Frank 7 years ago from Rochester

Hey, Ralph. This is both non-biased and interesting.

Where's all the lying and other BS that is normally in other health care reform posts? I almost miss it (haha)!

VERY REFRESHING and informative.

Keep up the good work.

Al

Ralph Deeds 7 years ago Author

Thanks, Al. I heard a comment on the radio that the bills are a bit short in the cost cutting department.

ColdWarBaby 7 years ago

Why does everyone insist on blaming a non-existent government for all the ills (pun?) of our nation?

Why is it that no one is willing to see what is in plain sight, right before their eyes?

Why is everyone in such abject denial?

There is no government in amerika. There is only a corporate plutocracy, ultimately ruled by an international banking cartel. The politicians are paid performers in a dog and pony show put on to maintain an illusion of governance for the deluded populace. Bread and circuses for the mindless masses.

Public programs are inefficient by intent. They are underfunded, understaffed and hindered in every possible way. They are sabotaged, plain and simple. Why? So the money masters can point and say, "see how terrible government programs are? These services must be privatized in order to make them efficient". Yeah. Just like health care.

Practically speaking, the only government agencies that are allowed virtually unlimited funding are those which provide benefits to the corporatocracy. Any agency that serves the for-profit military industrial complex is given carte blanche. All those that dole out corporate welfare to usurious finance, non-renewable energy, health non-care, inhumane factory farming and poisonous agribusiness are just fine. These are kapitalist enterprises that are "efficient". Yes, they are. They are efficient at stealing the wealth created by the working class and transferring it upward at an ever increasing rate to an ever shrinking number of individuals. Privatize the wealth to an elite few; socialize the debt to the masses. There are unlimited funds for the military and all industries that profit from usury, fraud, war and death. There is no money to be found to PROMOTE THE GENERAL WELFARE, and secure the Blessings of Liberty to ourselves and our Posterity.

The plutocracy has completely hijacked the "government". A charade of debate and contention between two halves of a single party is allowed to continue for the distraction of the public, making it that much easier for the money masters to tighten their control of the global "economy", a false economy based completely on usury, deception and outright lies.

Those who continue to worship at the altar of profit, take warning. Unless you are willing and able to "make a real killing" and become a bona fide member of the elite billionaire aristocracy, you will soon be joining the ranks of serfdom.

“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power” -- Benito Mussolini

James A Watkins 7 years ago from Chicago

Thank you for a clear synopsis of the health care bill. I am pleased to have read it.

opinion duck 7 years ago

Ralph

I think that this hub misses the point of the healthcare problem. The list that you have compiled is not a solution but a continuation of the problem.

This isn't my hub so I will not elaborate on what the real problem and solution is for healthcare.

Medicare is an example of how inept the government is in the area of running a business.

Ralph Deeds 7 years ago Author

Opinionduck, what is in this hub is a summary of the principal features of the House and Senate bills as compiled in a NY Times editorial. Feel free to explain what you think the problems are. I've been eligible for Medicare for several years and it works well for me. However, they need to work harder on reducing the costs which vary all over the map from community to community.

ColdWarBaby 7 years ago

opinion duck, are you unable to read?

Public programs are inefficient by intent. They are underfunded, understaffed and hindered in every possible way. They are sabotaged, plain and simple. Why? So the money masters can point and say, "see how terrible government programs are? These services must be privatized in order to make them efficient". Yeah. Just like health care.

vrajavala 7 years ago from Port St. Lucie

Politicians don't know a fig about medicine.

ColdWarBaby 7 years ago

Neither do insurance company executives or their employees vrajavala. Your statement is completely pointless and displays a lack of awareness.

Best CD Rates 7 years ago

It is great to read the details of health care reform. I agree that cost cutting should be done in many other ways but not cutting cost in providing care.

Insurance Menthor 6 years ago

Ralph, I agree with many of the issues you bring forth here. Very good information.

Certainly the big issue today is the high cost of health insurance, and the fact that people can not afford it, which results in so many uninsured.

But are the health insurance companies really creating the problems we have today. The answer is no.

Our politicians seem to want to ignore the core issues of this dilemma. Slapping a band aid on the real problems is not a solution. We need to take an in depth look at the health insurance companies and why our health insurance premiums have gone up.

Just so everyone knows, the increasing premiums are not created by some CEO that felt like raising the rates.

Insurance companies are only the messenger.

Personally, I think we need to quit putting all the blame on the health insurance companies. They are only the messenger.

The message they are delivering (higher premiums) is because of all the other problems in our health delivery system and our society.

Those core problems, one being malpractice, should be addressed first, before we start talking about any national health care reform.

Why does a doctor need to make big bucks. If he pays $70,000 a year for malpractice, and his staff and office costs are $120,000 a year and he wants to make $150,000 a year. In this analogy, then he needs to make $340,000 per year. 25 percent goes for the malpractice attorneys.

Then the doctors order extra tests that are probably not really needed, (more Insurance costs) but does so to cover their backside.

Congress lives in their world and not in ours. They don't understand any of the core problems facing the health delivery system, many of which you refer to.

I address some of these core problems on my hub site if anyone is interested.

Ralph Deeds 6 years ago Author

I guess that depends on how you define socialism. Conservatives cried socialism over child labor laws, minimum wage laws, Social Security, workers compensation, unemployment compensation, Medicare and other programs that have become accepted, useful components of our democratic free enterprise system. As I understand it, so-called Cadillac plans are believed to contribute to over usage of medical care and they give a tax advantage to those fortunate enough to have them compared to people who pay health insurance premiums with after tax earnings,

Ralph Deeds 6 years ago Author

Thanks for your comment. I was a beneficiary of one of the original "Cadillac Plans" at General Motors for 34 years. We had everything but pet care and home care. Now I'm paying for my own Medigap plans, and I've dropped the eye care, and dental care and I may drop the prescription drug plan. The tax law was one of the main drivers of these plans. And the plans did contribute to uncontrolled increases in health care costs.

Ralph Deeds 6 years ago Author

In my experience hospital bills are all over the map. Blue Cross and Medicare almost never pay the face amount on the bill which is charged to individuals without insurance who pay out of pocket (if they can). I didn't see your hub, but I'll read it.

Ralph Deeds 5 years ago Author

Where are the "death panels" when we need them?

Surgery is surprisingly common in older people during the last year, month and even week of life, researchers reported Wednesday, a finding that is likely to stoke, but not resolve, the debate over whether medical care is overused and needlessly driving up medical costs.